Fed's Brainard: Restrictive Policy Needed for Some Time

The transcript discusses the current economic indicators, highlighting a deceleration in wages and stable inflation expectations. It suggests that these factors may prevent a wage-price spiral similar to the 1970s. The Federal Reserve has moved its policy into restrictive territory to manage inflation and employment goals, adjusting the pace of interest rate increases. Despite high inflation, the policy needs to remain restrictive to achieve a sustained 2% inflation rate.

What economic condition is NOT currently being experienced according to the first section?

• Markup compression

• Wage-price spiral

• Stable inflation expectations

• Deceleration in wages

What action did the Federal Reserve take regarding the federal funds rate?

• Kept it constant

• Eliminated it

• Decreased it rapidly

• Increased it rapidly

Why is it important for the Federal Reserve to analyze more data?

• To increase employment

• To achieve a sufficiently restrictive policy level

• To decrease inflation to 1%

• To eliminate the federal funds rate

What is the target inflation rate the policy aims to achieve?

• 4%

• 3%

• 2%

• 1%

What is the main focus of the final section regarding policy?

• Increasing employment

• Reducing wages

• Maintaining restrictive policies

• Eliminating inflation